ORANGEVILLE – Invenergy’s problem may also be the town’s.
The Chicago-based company has delayed major work on the proposed Stony Creek Wind Farm, as it awaits renewal of the federal Production Tax Credit that supports renewable energy.
If the work doesn’t proceed, the Town Board may need to enact a major tax increase, after cutting taxes 50 percent last year when it received its first big payment on the project.
“At our last meeting, (Director of Business Development Eric Miller) reported that the project was has been slowed down substantially because Congress has not extended that tax credit yet,” said Town Supervisor Gerald Stout on Wednesday.
“If they don’t pass it at all, I believe this project will actually be pulled from (Invenergy’s) agenda entirely, and in that event Orangeville is going to have a real property tax problem, because we cut the property taxes in half last year as a result of the payment by Invenergy.”
The delay is hinging on efforts to renew the PTC, which allows 2.2 cents per kilowatt hour for wind, geothermal and “closed loop” biomass energy during a facility’s first 10 years of operations.
A Dec. 31 “in-service” deadline has been set for wind projects. The tax credit will then expire if renewal doesn’t occur.
A proposed extension attached to federal transportation legislation was defeated 49-49 on March 13, with 60 votes needed for approval. But another extension was proposed two days later.
Miller said by e-mail that passage may still happen this year. He said the PTC is an effective tool to help reduce renewable energy rates and support development of proven renewable energy projects.
A long-term extension, he said, would establish market certainty and avoid jeopardizing the emerging wind industry’s growth.
He said the company’s plan has been to complete construction and start commercial operations in 2012. But after a careful review of regulatory requirements – and based on the company’s experience building similar projects – officials concluded Dec. 31 is a tight schedule.
“Stony Creek has received all required permits, and is under contract to deliver renewable energy credits to the New York State Energy Research and Development Authority,” he said. “We plan to proceed with limited construction at Stony Creek, with full-scale construction starting when there is greater clarity regarding federal tax policy.”
“Major work would include construction of turbine foundations and installation of turbines,” he said. “We are evaluating the cost-effectiveness of beginning tree clearing and limited driveway construction this spring. These will enable the project construction to start quickly once we have more certainty on the tax policy.”
Invenergy’s subsidiary Stony Creek LLC made a good-faith payment last year which allowed the town to reduce its taxes by 50 percent – meaning its annual tax levy is currently $376,443, according to the Wyoming County Treasurer’s Office.
The company will be contractually-required to make a full payment of about $600,000 to the town if it pours the concrete base for a single turbine by Dec. 31, Stout said.
If that doesn’t happen and Orangeville doesn’t receive a payment, he said the Town Board would need to restore the old tax levy, amounting to a 100 percent increase.
Stout said Attorney David DiMatteo has been asked to prepare a local law allowing the town to exceed the state’s 2 percent tax cap if needed. He said the town obviously won’t raise taxes if Invenergy proceeds.
But he also questioned what would happen if Congress delays another decision on the PTC until after election season, which could delay major work even further. He also noted the measure’s prior defeat.
“Right now we’re kind of left with just being cautious and we’re probably going to go ahead and pass that local law unless something changes in the near future,” Stout said.
Invenergy is remaining coy about what will happen if PTC is not renewed.
Miller did not answer directly when asked if the project will proceed regardless of whether the tax credit is renewed.
“Until Congress renews the PTC, wind projects that come on-line after Dec. 31, 2012, will not be eligible to receive these tax credits,” he said. “The PTC enjoys strong bipartisan support in the U.S. Congress. Stony Creek remains optimistic these supporters will be successful in getting the PTC renewed.
“As a result, we plan to proceed with limited construction at Stony Creek, with full-scale construction starting when there is greater clarity regarding federal tax policy and the timing of an extension of the PTC deadline.”
The Stony Creek Wind Farm would include 59 wind turbines with a generating capacity of 1.6 megawatts each. The turbines would be about 430 feet tall.
The project has proven highly controversial in the town. Recent developments have included an appeal by the Clear Skies Over Orangeville group, after its latest lawsuit was denied in State Supreme Court.
Request for re-hearing denied
ORANGEVILLE – A request for a re-hearing on the Stony Creek Wind Farm’s authorization certificate was denied Monday.
The state Public Service Commission found resident Steven Moultrup’s legal petition did not specify any error of law or fact in the Dec. 15 order. It also concluded Moultrup didn’t identify any new circumstances warranting a different determination.
Moultrup had argued that resident Robert White’s successful lawsuit against the town and Stony Creek LLC showed the town had inaccurately mapped the location of structures in relation to proposed turbine locations.
White had sued last September because one of the turbine towers was too close to his hunting cabin off Bantam Road. State Supreme Court Justice Patrick NeMoyer ruled in his favor.
Moultrup’s petition was denied on both procedural and substantive grounds, according to the PSC.